Let this be the year that you start with a plan for your money. Get with a qualified financial advisor and ask them to help you figure out how much of a nest egg you need to build in order to retire at your target age. They will need to use your current assets and monthly income and spending as a baseline, but it shouldn’t take long to get a ballpark estimate of the amount you need to be on track to a comfortable retirement. Then you can see what your annual savings goal needs to be for 2014. And don’t get discouraged if you are not on track right now. Heck, you might not even bear near the track right now because you haven’t looked in a long time, or you had some setbacks. The important thing to to find out what steps it will take to get you straight. Then take one at a time, then keep reviewing and course correcting until you get there.
Start with the plan. Start with the end in mind. Three questions you need to get answers on… How much do you need to put towards long term savings, earning long term investment rates (meaning 4% or better annual averages – even if you are scary conservative 🙂 in 2014? How much do you need to increase your company 401k or 403b contribution level to in order to accomplish that? And how should that money be invested to work best for you in 2014?
Get professional help to have a dialogue conversation about money so that you can learn about what is available for use today, what pitfalls to avoid, and what your financial indepdence number is for you personally. Just talking with a friend who is always talking about money and “seems to know a lot” is not enough here. You need someone to look at your specific situation and get some customized advice. The consultation and conversation should not cost you anything. If you don’t have a financial advisor, ask friends for referrals of professionals they use, or you can start with your local bank or credit union as most have licensed individuals in house. Ask questions and get your numbers run so that you know what it takes to reach your goal. Get information. Don’t fall for a product pitch – what you want is a solution.